The first decade of the 21st century was a very busy time for the US military, but the facts are starting to show that it was even busier for a class of participants who have not traditionally been a part of America’s national security apparatus. Private contractors, who are neither soldiers nor civil servants, have risen to a level of prominence that would have been virtually unimaginable to the generals and Pentagon officials who oversaw the end of the Cold War 20 years ago.

Whether this development is welcome or worrisome may be a question of ideological predilection, but at minimum, it presents a challenge for a democratic republic that has struggled to strike a balance between national security and the public interest. In March, the Penn Program on Regulation presented a mini symposium advocating a legalistic approach to the issue, exploring ideas ranging from the structuring of contracts, to regulatory oversight strategies, to emerging precedents in tort law. The result was an uncommonly nuanced take on an issue that often polarizes those who try to tackle it.

Paul Verkuil, who heads the Administrative Conference of the United States, a federal advisory agency, opened the program by outlining just how prevalent private contractors have become. He drew liberally from a recent investigative series by The Washington Post as well as from his new book, Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and What We Can Do About It.

The role of private contractors in contemporary military and national-security operations is hard to overstate. American forces in Iraq, which have fluctuated between approximately 50,000 and 190,000, were joined by contractors numbering well over 100,000. Their contributions were significant—sometimes remarkably so, considering that an estimated 80 percent of them were not US citizens. Contractors working at Uncle Sam’s behest did everything from guarding fuel-tanker convoys to protecting American diplomats to remote-piloting drone aircraft. They were also involved in a number of grave wrongdoings. In September 2007, employees of the firm Blackwater (which subsequently changed its name to Xe Services) shot and killed 17 Iraqi civilians in Baghdad. Contractors were implicated in the torture of Iraqi prisoners at Abu Ghraib prison. In 2005, US Representative Randy Cunningham, a California Republican on the House intelligence committee, went to prison for accepting $2.4 million in bribes from a defense contractor angling for CIA contracts.

The corporate sector has come to play an integral role in military operations and within each of the US government’s 16 intelligence agencies. The Washington Post estimated last year that out of 854,000 people with top-secret clearances, some 265,000 are contractors.

But Verkuil pointed out that the influence of contractors is, in the most literal sense, impossible to gauge. As Secretary of Defense Robert Gates told the Post: “This is a terrible confession; I can’t get a number on how many contractors work for the Office of the Secretary of Defense.”

Said Verkuil: “Based on things like security clearance, we know that there’s a significant number. The government is very much in private, as opposed to public, hands.”

It is illegal for the government to outsource “inherently governmental functions,” which include, Verkuil said, “any function that involves a use of force.” But this law is now more honored in the breach than in the observance. So what are we to do?

That question fell to Linda Dickinson, a law professor at Arizona State University and the author of the new book Outsourcing War and Peace: Preserving Public Values in a World of Privatized Foreign Affairs.

One thing we probably can’t do, Dickinson said—drawing agreement from Verkuil—is turn back the clock to a time when military and intelligence operations were the exclusive purview of government personnel.

“The genie is out of the bottle,” she said. “We are in a world of privatized foreign affairs … and we can’t go back.”

The reasons range from the political clout of these highly profitable firms to the belief among some people, both in and out of government, that the complexity of modern warfare has made private firms indispensable to its conduct. Tasks like operating drone aircraft, for example, entail skill sets that command high prices on the open market, and in some cases may only be possessed by the aircraft’s designers.

“That goes to the deeper problem of government,” observed Verkuil, “which is that government pays very well for jobs that are not too complicated, and doesn’t pay very well for jobs that are complicated. So when you’re trying to find the talent—and you have to go through the constraints of the government hiring process—you are kind of pushed, even though you don’t want to do it, into the direction of contractors.”

It’s not only the national-security apparatus where this happens, he added. “The Environmental Protection Agency now uses contractors to write rules” on account of how complicated the underlying science is.

If it is the case that outsourcing has become essential to national-security operations, the question becomes one of how the government can do a better job of neutralizing the threats that the use of contractors poses to the public interest.

“The dominant narrative,” said Dickinson, “is that we don’t have enough law out there to deal with the contractors operating overseas. That we need new laws and new regulations.

“[But] we actually have a very thick web of laws that does apply to the contractors,” she said, noting that the US expanded the Uniform Code of Military Justice to cover contractors, and that international law addresses non-state actors and contractors operating in combat zones. “The issue is not the absence of law, but the way that it is enforced and certain institutional arrangements that we have to deal with that enforcement.”

For starters, there are the actual contracts themselves. In a comparative analysis of national-security contracts and contracts used by state governments to procure things like healthcare, prison, and education services, Dickinson found that the terms of national-security contracts tended to be “strikingly vague.”

“At the time of the 2007 Blackwater incident,” she pointed out, “contracts with the Blackwater security firm were notably lacking in their terms about training in the use of deadly force. So that’s a place where we could easily reshape the contracts to incorporate the ideas from international human rights law [and apply them] directly to contractors.”

Doing that may mean restoring a regulatory-oversight apparatus that hasn’t kept up with the sea change in military contracting.

“We’ve increased the DOD obligations on contracts, for example, from $92 million to over $200 million from 2001 to 2008,” Dickinson remarked. “But we’ve shrunk the oversight workforce. These people were trained in an era when we were outsourcing production and goods—not services. So they don’t understand the issues fully. They don’t want to go to conflict zones. And so it’s a huge difficulty. It’s not a sexy issue, but we have to improve the management and oversight of these contracts.”

A lot of money is riding on improving oversight.

“There’s this assumption that using contractors is more efficient,” Dickinson observed. “But in the foreign policy arena, nobody did the math before outsourcing … And one of the problems with reducing the oversight personnel [while] increasing the number of contractors we had [under] supervision is that we’ve documented cases where we’ve really wasted a whole lot of money.”

There’s also a need for on-scene investigative units to assess the performance, and blunders, of contractors. In the Blackwater shooting, Dickinson said, “it took two weeks for the FBI to get there. So it was arguably an evidentiary problem [that] threw a wrench into a case that was eventually brought … against those contractors.”

Such cases also hang on the question of how tort doctrine will or should develop. For example, some contractors have fought tort claims by arguing that, as agents of the federal government, they share the government’s immunity to lawsuits.

“The district court in DC got it right in a case coming out of the Abu Ghraib scandal,” Dickinson said. “The court drew a distinction between contractors who were supervised closely by governmental actors—and therefore should get the benefit of governmental immunities—versus contractors who were not supervised by government employees and who were acting much more independently. In that case, the interrogation contractors in Abu Ghraib supervised the troops. [But] they didn’t have supervision or control by the military, [so] arguably they shouldn’t get the benefit of the immunity.”

Contractors have also brought cases of their own accord, seeking redress for harm they have suffered. That phenomenon may signal the arrival of what Dickinson calls “a real regulatory moment,” an opportunity to impose standards on an industry that may have profited from the lack of them but has begun to feel the downside of their absence.

“There’s some exciting reforms that could take place,” she said. “Part of that is because of the actions of people within government. But also because the firms want it, too. Now, obviously they’re somewhat self-serving in what they want, but there are a lot of firms that really want better information. Security firms will say, ‘I want to do more vetting of my employees, but I can’t do it because I’ll get outbid; so I want a rule that mandates it.’”

Financial concerns may drive reforms of that variety, but the biggest costs of war are measured not in dollars but in lives lost. The privatization of war has also skewed that accounting, a major reason the last three presidents have amplified the roles and responsibilities of contractors.

“If you look back to the Clinton era and the Kosovo conflict, he actually dramatically increased the number of contractors there,” said Dickinson. “It was to reduce the political costs of war. [This trend] accelerated under Bush. Now it’s accelerating further under Obama.

“One of the huge problems is that we’re counting the number of troops killed but not contractors; so [the total casualties are] really masked. And even now that we’re doing a better job of reporting the number of citizen contractors who were killed, it’s reported to the Department of Labor”—not as a part of the official war-casualty count.

Whatever one thinks about the outsourcing of national security to private contractors, the public interest surely is not served by hiding their ultimate sacrifice from clear view.—T.P.